Advice: To switch or not to switch?

x.sophie.x

Hi Moneysavers,

I'm looking for some advice really. After several years of being foolhardy with my finances, at the start of 2012 I decided to get to grips with my debts (which were all maxed out) and pay them all off. To date my credit utilisation is:

Comet/Santander - £0/£550
Ikea - £0/£600
Barclaycard @ 29.9% APR- £1450/£3300

Total debt repaid in 4 months: £3000! :j

The barclaycard 29.9% interest rate is extortionate. I am ashamed to admit it, but I never really paid attention to what my rates were. I tried to shift my debts a couple of years a go to Virgin card I think - but was rejected. Probably because of my credit utilisation being 100% at the time. I just need to add that in general my credit history is good (all green), but I have a couple late payment/missed markers on my credit report via barclaycard. These were genuinely 1-2 days late, because of fluctuating payment dates... and again at the time, I never fully realised that 1-2 day late payments would mess up my credit history. I now know how costly and stupid a mistake this was - and will never do it again.

I am currently paying £700 a month on my Barclaycard, so will be free in 2-3 months. However, I do still wish to keep a credit card once I have paid this all off - but one that provides a lower rate, which I will make sure I pay off in full.

I contacted barclaycard the other day, asking for my rate to be reduced, but was told no. So I now need to assess my options. Do I shift my debt to a 0% card now, or stick it out with barclaycard since I will only take 2-3 more months? The only reason why I think I should stick with barclaycard is because I don't want to be rejected elsewhere. My boyfriend and I are wanting to buy a house this year (deposit courtesy of parents), so I don't want many searches on my report before applying for a mortgage.

I wouldn't mind applying for a credit card, if I knew I had a good chance of being accepted. I did a soft search on Nationwide and it came back with £1000 limit @19.9%. From what I see a 19.9% rate quotation pretty much means a rejection? So I think my late payments bring my credit rating into sub-prime territory. The cap1 balance card looks good - with the 0% balance transfer, but the purchase APR is even worse than what I'm on now!!!

Do you guys have any advice as to what I should do - both immediately and long term? I'd really appreciate any feedback you have.

Sophie

JournalGirl

If you can pay of the purchases in full every month, then the interest rate is irrelevant, it only kicks in when you carry some debt over to the next month. So probably better sticking where you are and not risking a rejection. (and keep paying off every month...do it by direct debit so that you don't mess up on the dates)

scott_lithgows

x.sophie.x wrote: »

Hi Moneysavers,

I'm looking for some advice really. After several years of being foolhardy with my finances, at the start of 2012 I decided to get to grips with my debts (which were all maxed out) and pay them all off. To date my credit utilisation is:

Comet/Santander - £0/£550
Ikea - £0/£600
Barclaycard @ 29.9% APR- £1450/£3300

Total debt repaid in 4 months: £3000! :j

The barclaycard 29.9% interest rate is extortionate. I am ashamed to admit it, but I never really paid attention to what my rates were. I tried to shift my debts a couple of years a go to Virgin card I think - but was rejected. Probably because of my credit utilisation being 100% at the time. I just need to add that in general my credit history is good (all green), but I have a couple late payment/missed markers on my credit report via barclaycard. These were genuinely 1-2 days late, because of fluctuating payment dates... and again at the time, I never fully realised that 1-2 day late payments would mess up my credit history. I now know how costly and stupid a mistake this was - and will never do it again.

I am currently paying £700 a month on my Barclaycard, so will be free in 2-3 months. However, I do still wish to keep a credit card once I have paid this all off - but one that provides a lower rate, which I will make sure I pay off in full.

I contacted barclaycard the other day, asking for my rate to be reduced, but was told no. So I now need to assess my options. Do I shift my debt to a 0% card now, or stick it out with barclaycard since I will only take 2-3 more months? The only reason why I think I should stick with barclaycard is because I don't want to be rejected elsewhere. My boyfriend and I are wanting to buy a house this year (deposit courtesy of parents), so I don't want many searches on my report before applying for a mortgage.

I wouldn't mind applying for a credit card, if I knew I had a good chance of being accepted. I did a soft search on Nationwide and it came back with £1000 limit @19.9%. From what I see a 19.9% rate quotation pretty much means a rejection? So I think my late payments bring my credit rating into sub-prime territory. The cap1 balance card looks good - with the 0% balance transfer, but the purchase APR is even worse than what I'm on now!!!

Do you guys have any advice as to what I should do - both immediately and long term? I'd really appreciate any feedback you have.

Sophie

I got the Nationwide card after being quote of 19.9% on £1500,minimum payment is £25 so thats 17x£25 dealt with if you get it.

Have you tried www.creation.co.uk ? They are usually good for a credit card

blitzboy

Hi Sophie

It is worth applying for a 0% card as you will save on interest, even if you do get it all paid off in a few months. It will also mean that you wont have to pay it off so quick so can put the money aside in a savings account and earn a bit of interest until the 0% rate ends, just paying just above the minimum amount each month on the card.

You may get accepted, you may not, but 1 application won't hurt your credit rating. This will only occur if you keep trying others after being rejected.

Halifax seem to be accepting a lot of applications on their 17 month 0% card at the moment, both me and my partner have just got one. Also, it might be worth trying your own bank first, providing they have a decent 0% offer on.

Hope that helps

blitzboy

Just to add to my last post, I've just re-read your post and seen about the missed payments.

As this would have impacted your credit rating, perhaps the card to try is capital one 6 months 0%. Their APR will be higher after the 0% period ends, but hopefully you can continue as you have been and get it paid off by then.

bigbopper69

Hi Just to comment on the Barclays initial card, it is an high interest rate but is designed as a credit building card and to be paid off in full each month, and hopefully after proving that upgrade is available with a lower interest rate after a short while, well i am hoping that is the case that is why i took it on in the first place.

Cash_Flow

scott_lithgows wrote: »

I got the Nationwide card after being quote of 19.9% on £1500,minimum payment is £25 so thats 17x£25 dealt with if you get it.

Have you tried www.creation.co.uk ? They are usually good for a credit card

Similar story to me, I was offered £2500 @19.9% and accepted.